Succession is an inevitable event in the life of a family business. The mode and the strategies employed to facilitate the trans-generational transition of ownership and control have been observed to have a significant influence on the survival and performance of family businesses. Against the background of minimal research on family business succession in Kenya, and rich entrepreneurship, this study aimed at determining the nature of business succession strategies and their influence on the performance of small and medium family businesses in Nairobi. Data on the businesses’ transition strategies and their performance were obtained from 249 SMEs through a structured questionnaire and interviews. The results indicate that family owned SMEs in Nairobi did not explicitly document their succession strategy. However contrary to expectations regarding the nature of succession, it was evident that they make significant unwritten plans for trans-generational succession. While the study did not indicate a strong and significant relationship between succession and firm performance, it emerged from the case studies that firms that went through smooth succession also recorded significant growth post transition. The results are discussed in terms of their implications for the pertinent theories, previous research findings and family business management.
Key words: Succession strategy, family owned SME, performance.